United Church of God, an International Association
Council of Elders Meeting Report

Monday, August 5, 2002 ‚ Cincinnati, Ohio

The Council of Elders began its current round of meetings today with a series of fiscal year-end reports and operation managers' projections for the next two years of Church growth and development.

President's Report

Council Chairman Clyde Kilough called the meeting to order, and pointed to the full docket for the four-day set of meetings. He observed that two of the committees of the Council would need to select new committee chairmen today (Doctrine, and Education/Ministerial Services committees). Gary Antion, as chairman of the Roles, Rules and Ethics committee, read the Council Code of Ethics, the usual practice for the first face to face Council meeting of the fiscal year. Mr. Kilough led the Council through the approval of all minutes of recent Council meetings, and then introduced Roy Holladay, the Church's president, for his report.

Mr. Holladay first described some of the routine of the office staff, including a weekly Monday morning staff meeting, which he opens with prayer and a short "Compass Check" ‚ a reminder of the direction the home office staff is striving to follow. He commented that his remarks to the staff this morning involved stressing that the Council has the oversight of the Church; that the home office staff receives its "marching orders" from the Council of Elders, and then carries out the policies, procedures, and plans for the work of the Church.

He organized his report into two basic sections ‚ a summary of issues facing the Church right now, and an explanation of how he is working to carry out the mandates given him in his role as president by the Council of Elders and the General Conference of Elders.

The summary of current issues and newsworthy items included:

• The loan for the home office building has been finalized and signed. The Church borrowed $1.6 million (as part of a total outlay of just over $2.65 million, including the price of the land) for 15 years, at an interest rate of 6.1%. This was considerably better than the 8.2% first envisioned nearly two years ago, due to interest rate reductions in the industry. The balance of the cost has been paid for from current operating funds.
• The possible assumption of oversight for the work of the Church in Kenya by the South African region, since the arrival of Bill and Cheryl Jahns to serve the churches there. Dave Baker, upstate New York pastor who has been working with Kenya, could then shift some of his energies further east to parts of Southeast Asia, including helping in the Philippines.
• The operation in the Philippines, with the assistance of Australian Council president Bill Eddington, Church legal counsel Larry Darden, Council member Bob Dick, and Mr. Baker, will be simplified by a rewriting of the church constitution for the country. Filipino elders Ed Macaraeg and Fiorante Siopan were instrumental in requesting assistance in this matter, having discussed it at length with Mr. Kilough.
• The United Youth Camp in Oregon (Camp Davidson) started on schedule Sunday, August 4. The forest fires burning only two miles away were 100% contained by August 1; staff arrived the following day, Friday, August 2, and the campers came in on Sunday, August 4.
• Mr. Holladay shared his thoughts on how to keep the Council posted on administrative operations. The dilemma, as he sees it, is whether to share a great deal that is only in the "thinking stages" or wait a little longer until plans have been further fleshed out. He leans towards sharing material earlier in the process, asking for the Council's understanding that some issues may be in very early and rather rough stages of development.

In that light, he had a few thoughts to pass on. For example:

• The possibility of the Church's forming a foundation, similar to the LifeNets organization, to assist its members who are in need. Is there a way that such a foundation could cooperate and work closely with LifeNets?
• Further exploring contact with other Sabbatarian groups.
• Facing directly one of the key issues confronting the Church right now ‚ the aging ministry. Within 10 years, 39 of our 91 pastors (in the United States) will be at least age 65; 25 of them will be at least 70. That requires hiring at least four new pastors every year for the next ten years just to try to "hold our own." But replacing an active pastor usually means retiring another man, which also bears a cost. In general terms, between hiring and equipping a new pastor to serve, and retiring his predecessor, the Church can be facing an annual cost of $100,000 for each such replacement (total costs involved for both men). What about financing health care for retirees? Or for the widows of pastors? Current programs can always be reexamined. The Ministerial Candidate program is a good start, but it is just a start.
• What about the Eli Lilly grant we are seeking to promote pastoral excellence? If it is turned down (we will know by October), how will we fund these programs?
• Are some of our pastors wearing so many "other hats" that they do not have enough time or energy left to pastor? How can we share the workloads more equitably?
• The membership is also aging. What impact will this have on church operations?
• How can we continue to help our youth see the value of following God's Way as they grow into maturity?

There is much to consider! Mr. Holladay then handed out an update on the Council mandates for the president, with information on past action, ongoing procedures, and future plans for each mandate. There is a great deal of information in this area, but in summary, the mandates and basic material on fulfillment include:

• "Continue to promote, evaluate, and improve the Christ-centered Servant leadership (CSL) Program throughout the Church." Progress is ongoing, including meetings with home office staff, discussions of the management team, and continued work by the CSL task force. Mr. Kilough will make a presentation to the attendees at the Ministerial Candidate program in August, and a combined meeting in December of the Council, regional pastors and home office staff will cover further information, in preparation for further development of plans for the ministry and membership.
• "Work with the Council, Media/Communications Committee, and the Media Operation Manager to: a) Implement the Internet resolution. b) Develop a plan for utilizing broadcast media. c) Evaluate the effectiveness of print media, including GN circulation, booklets, and subscriber development." The search for a full-time website manager/editor has begun. The Tomorrow television program now has a team of reviewers and review process in place; further promotion of its use is planned. Research into the possibility of TV ads continues, along with exploration of other avenues for subscriber development. An evaluation process to gauge the effectiveness of print media is planned by July 2003.
• "Work with the Council, the Education/Ministerial Services Committee, and the Ministerial Services Operation Manager to develop and execute ministerial policy regarding: a) Transitioning ministers from full-time to retirement. b) The spiritual growth of the brethren/care of the congregations. c) The development of new pastors/elders. d) Various educational projects for the ministry and brethren. e) Improving the effectiveness of the ministry." The Ministerial Candidate program is underway to fulfill many of these aspects of the mandate. We will know in October whether we will receive funds from the Lilly Foundation for our Pastoral Excellence Program. If we do, the program would be implemented in January 2003. If not, implementation would begin in July 2003.
• "Promote unity within the church, ministry, and home office." Progress includes emphasis on the CSL (see above), the humility of Christ, focusing on the Council for leadership, and regular meetings with the staff and managerial team (including the weekly prayer and "Compass Check" discussed earlier). Work must continue on harmonizing all efforts, local and central, in doing the work of the Church.
• "Build the image of the church with the general public." Brainstorming with the Council is needed to establish where we go with the concept of public affairs.
• "Develop assessment tools for analyzing the effectiveness and efficiency of all church projects, programs, and personnel." Target date to have this in place: July 2004.
• "Continue a regular presidential letter regarding the accomplishments of UCGIA." This operates now, with a letter from the chairman of the Council one week, from the president the next week and the home office update in week # 3.
• "Give a quarterly report and analysis on the state of the church (to the Council)." This is done at all face to face meetings of the Council.

Operation Report ‚ Treasurer

Tom Kirkpatrick presented an overview of the Church's finances verbally, with much more detail in print for the Council. In general terms, allowing for the costs of home office construction to be capitalized as an asset, the fiscal year ended June 30, 2002 with an excess of income over expenses to the tune of approximately $611,000. This amount was used as part of the down payment on the home office building. Expenses were 1.8% over budget, but income was 5.4% over the budget of $17 million. In the first five weeks of the new fiscal year, income is up nearly 8% over the comparable period last year.

What of the future? Mr. Holladay explained to the Council what he had asked each of the operation managers to do: present to the Council their vision of a projected budget for the next fiscal year (July 1, 2003 ‚ June 30, 2004) for their respective areas. Then he asked them to include a "wish list" of projects ‚ what they would like to do if funds were available. All projections, of course, needed to be accompanied with cost estimates. This way the Council can see well in advance of its February 2003 deadline what might be accomplished in a new budget year. Its members can then discuss projects with the various operation managers, make suggestions, and fine-tune the process well ahead of the deadline for presentation of a budget to the General Conference of Elders. The process will be repeated at the Council's December meetings.

Mr. Kirkpatrick was the first to tackle this in his presentation. He explained some of the factors that will impact the budget. One major area will be health care premiums the Church pays for its employees. The insurance industry as a whole has taken a huge "hit" in the wake of the September 11, 2001 terrorist attacks, and the costs tend to be spread throughout the industry, whether specific policies seem directly affected or not. In addition, the employees are all aging, and that has its effect on health care costs, which are passed on in premium increases. In considering its coverage, the Church must pay $49,000 of the first $50,500 for an individual employee's health care costs in any given year, before our insurance takes over (the employee pays the other $1,500) ‚ our program is self-funded to that extent. The lowest premium increase we have had quoted for next year's coverage is $8,000 per month ‚ or nearly $100,000 more for the annual cost, irrespective of the amounts actually paid out in direct medical costs by the Church, which are also likely to increase. What of cost-of-living raises for employees? Though the cost of living has gone up for everyone, there have been no across-the-board raises since 1996 (except for certain fringe benefits, most notably the matching contributions by the Church to each employee's 403b retirement plan, up to a maximum of $4,000 per person per year). More ministers will be retiring, and international subsidies are expected to increase, as are congregational subsidies. All these areas carry price tags, and Mr. Kirkpatrick outlined those estimates in his vision of the budgetary future.

Operation Report ‚ Ministerial Services

Richard Pinelli gave an overview of Ministerial Services next. He stressed his appreciation for the continuing peace in the churches, noting that there simply were no major problems in the past fiscal year, from his perspective. Ministerial Services exceeded its budget by just under 2%, but this was due to the unforeseen opportunity to hire several pastors from the Church of God, A Christian Fellowship. Their service has been vital to the operation of the United Church of God this past year.

Mr. Pinelli gave a rundown of the various operations of the Ministerial Services area in the past year, including regional conferences, personal correspondence work, festival administration, and education program updates. Of note here is the implementation this summer, for the first time, of Stage Four in the Pastoral Assessment tools package ‚ the input of the congregations.

What lies ahead? At least six new hires need to be made in the field ministry, in order to continue the basic level of service to God's people that has marked the United Church of God. The Ministerial Candidate program must go ahead. Regional conferences need to be held again ‚ there were none budgeted for the current fiscal year. And there will need to be some transfers ‚ probably about the same number as this year (11), plus transfer costs for those men replacing retiring pastors (perhaps four more). And then there is the "wish list" ‚ things like salary adjustments based on merit and/or seniority, a new church hymnal, replacing worn-out equipment, the increasing cost of handling the growing volume of personal correspondence, and the possibility of one or two European-style "retreat-type" Feast sites in the United States.

But by far the most pressing issue for Ministerial Services is the topic raised earlier by Mr. Holladay. Our ministry is aging, and we are only now seeing the first efforts to train new pastors to replace those who will be retiring in the next few years. We have already had a large attrition rate. In 1995, the United Church of God began with 123 pastors employed to serve the needs of the U.S. brethren. That number is currently 96. By the end of this fiscal year, after retirements, the number will be 91. Four men have resigned from the full-time ministry in the last two years; two have died. Five have been retired in the last year, and more will retire this year. Three have gone to serve in international areas, but only one has moved from international to U.S. service. The trend is in place, but must be reversed. Two men have been recently hired ‚ Andy Burnett and Joe Horchak. More are expected to come from the Ministerial Candidate Program. Mr. Pinelli asked the Council members to reflect on all these factors as they mull over the budget proposals for fiscal 2003-2004.

Operation Report ‚ Media/Communications

Peter Eddington presented the report for the media area of operations. As he said, "without going through a tedious line-by-line review of the 2001-2002 Operation Plan, it can safely be stated that all major projects and categories were more than met or even exceeded." A quick glance at his handout material certainly confirms that overview ‚ from the growing booklet list (now 28, with the addition of "Who Is God?") to the Good News print run (now over 500,000) to the Bible Study Course enrollment (over 9700), to responses to Good News Radio, the cable access TV programs, and our Internet presence, to the increasing World News and Prophecy circulation ‚ all continuing to reach out in the proclamation of the gospel of the Kingdom.

Looking ahead to 2003-2004? Mr. Eddington's projections include increasing Good News circulation to 650,000 copies, printing four new booklets, encouraging local congregation involvement in cable access TV, increasing to 25 stations airing the Good News Radio program (15 as of August 10), print five or six booklets in Braille, continuing to develop response to the Bible Study Course, and producing a printed version of the currently online-only Youth United magazine. The "wish list" could include increasing the Good News to ten issues per year from the current six, upgrading digital editing equipment, constructing a video recording studio at the home office, and going to two-color covers on the United News. As with the Ministerial Services and Treasurer's presentations, "price tags" were attached for the Council to consider.

ABC ‚ Future Projections

Gary Antion presented an update on the Ambassador Bible Center program, which has just completed its third year of operation. Fifty students graduated on August 4, bringing the three-year total of those who have completed the program to 113. Two new faculty members were added to the adjunct teaching staff in the past year ‚ Melvin Rhodes and Matthew Fenchel. Students continued to serve in numerous capacities in the Cincinnati area and beyond.

The ABC staff will continue to present the mini-sampler ABC programs in outlying areas, and investigate the feasibility of increasing from three to four such programs per year. The library resources will be expanded, and work will continue with an accredited institution to try to obtain transcript credit for students for some of their ABC classwork. One major goal is to try to obtain permission from the United States Immigration and Naturalization Service to admit international students on student visas. Material will be shared with the ministry in an ongoing educational effort. Hiring two Teaching Assistants from each year's class would aid both resident and adjunct faculty. Expanding to future recommendations, a video explaining the ABC program could be developed, much like the promotional videos many colleges and universities use to describe their programs. The Council of Elders might consider sponsoring one international scholarship per year for a student to study and work at the home office to gain skills that could be of service in his or her home country upon completion of the program. And efforts could be considered to try to consolidate regular housing for students in fewer locations.

In wrapping up the news of the day, Mr. Kilough announced that the Education/Ministerial Services committee had chosen Richard Thompson to serve as its chairman; the Doctrine committee has asked Jim Franks to serve as its chairman.

-Doug Johnson

© 2002 United Church of God, an International Association